Related Videos

Housing deal eliminates finders' fees

Real estate agents who find a buyer for houses listed by flat-fee agents on the MLS can expect to be paid something for their effort - one, shiny penny.

That's the minimum amount set out in an agreement between the Competition Bureau and the Canadian Real Estate Association in an agreement ratified by CREA boards. The deal puts an end to the year-long battle, and ensures that homeowners can pay a broker a flat-fee to have their homes listed on the Multiple Listing Service.

The deal - posted Monday - ensures that brokers who post listings for a flat-fee and then do nothing else can continue to operate. The deal also ensures that sellers who opt for a flat-fee listing can have their contact information made available to interested buyers, through a link on the MLS listing.

As always, only licensed brokers will be allowed to post listings.

"[The settlement] reaffirms the commitment to the rule of law and our commitment to competition," said Georges Pahud, president of CREA, after Sunday's vote.

The real estate association has been locked in a battle with Competition Commissioner Melanie Aitken since the beginning of the year, when she said CREA kept its members from offering services that would lower costs for consumers.

Aitken said the settlement ensures Canadians will be able to choose between different service models.

"For Canadian homeowners, it ensures that they will have the freedom to choose which services they want from a real estate agent and to pay for only those services," Aitken said. "For real estate agents, it ensures that they will be able to offer the variety of services and prices that meet the needs of consumers."

A host of services have already started, with some offering to post listings for as little as $100. Joe William, an Ottawa broker, has been offering one-cent commissions for most of this year.

"My customers aren't interested in paying commissions," he said. "So that's why we use that price. And I'm telling you, some agents write to me asking for that penny."

Propertyguys.com, the country's largest for-sale-by-owner company, is using an Ontario broker to post its clients' listings and offers real estate agents a finder fee of $1 - although it encourages its customers to negotiate a commission with anyone who finds them a buyer.

Phil Soper, president of Royal LePage, said the deal was a reasonable one. However, he said the contents of the agreement are almost less important than the fact that a settlement has been reached after a difficult year of negotiations.

"For the industry overall it will be great to get this behind us," he said. "You have no idea how distracting this has been, at a time when the market itself has been tumultuous - it was expanding rapidly, people were worried about bubbles and then it contracts. Against this backdrop, you have all this disagreement. It was very distracting."